Planned Parenthood clinic director Sue Thayer filed the lawsuit against the abortion giant’s Iowa affiliate accusing it of submitting “repeated false, fraudulent, and/or ineligible claims for reimbursements” to Medicaid and failing to meet acceptable standards of medical practice. Alliance Defending Freedom (formerly the Alliance Defense Fund) filed the suit for Thayer in March 2011, but it only became public yesterday.

“Americans deserve to know if their hard-earned tax money is being funneled to groups that are misusing it,” said Senior Counsel Michael Norton, a former United States Attorney who is handling the lawsuit for ADF. “People may hold different views about abortion, but everyone can agree that Planned Parenthood should play by the same rules as everyone else. It certainly isn’t entitled to any public funds, especially if it is defrauding Medicaid and the American taxpayer.”

Alliance Defending Freedom attorneys filed the suit under a federal law that allows “whistleblowers” with inside information to expose fraudulent billing by government contractors. By law, such cases may not be made public until a court unseals them. In March, a federal court unsealed a similar Alliance Defending Freedom lawsuit against a Texas Planned Parenthood affiliate.

“During my last years working at Planned Parenthood, it became increasingly clear to me that not all of their policies and protocols were completely legal and ethical. After much thought, I contacted the Alliance Defending Freedom,” Thayer said about the lawsuit. “I believe that it is an important piece in the nationwide effort to shed light on the darkness and deception surrounding America’s largest abortion provider – Planned Parenthood.”

Thayer, former manager of Planned Parenthood’s Storm Lake and LeMars clinics, has sued under both the federal and Iowa False Claims acts. The suit alleges that Planned Parenthood knowingly committed Medicaid fraud from 2002 to 2009 by improperly seeking reimbursements from Iowa Medicaid Enterprise and the Iowa Family Planning Network for products and services not legally reimbursable by those programs.

The lawsuit alleges that Planned Parenthood of Greater Iowa, an affiliate now known as Planned Parenthood of the Heartland, filed nearly one-half million false claims with Medicaid from which Planned Parenthood received and retained nearly $28 million. If Thayer prevails, Planned Parenthood could be ordered to pay the United States and Iowa as much as $5.5 billion in False Claims Act damages and penalties.

ADF explains that the lawsuit points out how Planned Parenthood, to enhance revenues, implemented a “C-Mail” program that automatically mailed a year’s supply of birth control pills to women who had only been seen once at a Planned Parenthood clinic and usually by personnel who were not qualified health care professionals. After that, Planned Parenthood mailed thousands of unrequested birth control pills to those clients.

Planned Parenthood’s cost for a 28-day supply of birth control pills mailed to clients was $2.98, but the Medicaid reimbursement Planned Parenthood received for the pills was $26.32. In some cases, the Postal Service returned the birth control pills to Planned Parenthood. Instead of crediting Medicaid or destroying the returned pills, Planned Parenthood resold the same birth control pills and billed Medicaid twice for the same pills.

The suit also claims that Planned Parenthood coerced “voluntary donations” for services and then billed Medicaid for them. In effect, the lawsuit explains, Planned Parenthood both falsely billed Medicaid and took money from low-income women by getting them to pay for services Medicaid was intended to cover in full.

Jenifer Bowen, the executive director of Iowa Right to Life, told LifeNews her group is fully supportive of the lawsuit.

“Iowa Right to Life has been exposing Planned Parenthood’s dishonest practices for years,” she said. “That they would rip off low-income women for profit is no surprise. Their CEO, Jill June, alone makes over $265,000 a year. I cannot wait to see how they spin this.”

The lawsuit Thayer v. Planned Parenthood of the Heartland is pending in the U.S. District Court for the Southern District of Iowa. Des Moines attorney J. Russell Hixson, one of nearly 2,200 allied attorneys with Alliance Defending Freedom, is assisting with the case.